German reinsurance giant Munich Re reported a drop in its second-quarter profit on Tuesday as market volatility took a toll on investments, but the firm maintained its 2022 performance target.

The group's preliminary net profit reached €768 million between April and June, down from €1.1 billion in the same period last year.

Munich Re, whose business consists mostly in covering the risks taken on by insurers, said the value of its holdings had slumped by €908 million, mainly due to losses on equity investments.

Its profit target of €3.3 billion for 2022 remains unchanged, though it warned of "considerable uncertainty owing to fragile macroeconomic developments, volatile capital markets and the unclear future of the pandemic".

Munich Re’s profit target of €3.3bn for 2022 remains unchanged, though it warned of "considerable uncertainty owing to fragile macroeconomic developments, volatile capital markets and the unclear future of the pandemic"

CEO Joachim Wenning said the group had posted a "solid quarterly result despite fierce headwinds from inflation, the cooling economy and the war in Ukraine".

Munich Re lost €90 million as a result of Russia's invasion of Ukraine, while the bill for natural disasters came in at €253 million.

The drought in South America alone cost the group €130 million, it said.

However, premiums beat expectations to rise 8.3 per cent year-on-year in the second quarter to almost €16 billion, boosted by growth in property-casualty reinsurance.